Reborn in America, I am a legendary short seller on Wall Street.

Chapter 123: Teaching a Lesson to the Metropolitan Gambling Firm, Making a Huge Profit (4k views, requesting monthly votes)
Meanwhile, Mr. K had already dispatched his 35 young men to various gambling dens in Boston and the surrounding towns.

After two weeks of development, Mr. K has recruited 50 young men around 20 years old, and after careful selection, he has kept 35 of them.

There were more than a dozen people, who were already experienced professionals who had worked with Mr. K before.

Mr. K allocated $100 to them today, while the newbies were allocated between $15 and $70.

Before they left, Mr. K specifically told them that the name of this target was "Western League," and that they should buy it after they arrived and sell it after the stock price rose.

Mr. K carefully selected the gambling establishment for this occasion.

After eliminating those betting companies that had made too much money the previous week and were therefore more wary of, and further eliminating those with strong backing according to intelligence, the remaining betting companies were all very good "easy targets".

Of course, the focus of this Plan C was still on Metropolitan Casino. Those veterans with $100 in capital basically went to Metropolitan Casino's branches all over the world.

After seeing off the 35 young men, Mr. K, touching his trading order for 50 shares of Barrington he bought last Thursday that he hadn't yet closed, strolled leisurely to the largest Metropolitan Casino where Larry had previously stayed.

Mr. K bought 50 shares of Barrington on Thursday, intending to cover up his casual purchase. Coincidentally, the stock experienced a surge, jumping from $16.5 to over $18, and never fell back to its initial price at that level.

Larry analyzed that the stock is very likely to break through $20, allowing Mr. K to close his position when it reaches above $20.

Therefore, Mr. K has kept this transaction slip.

When Mr. K arrived at the Metropolitan Casino, he found that everything was the same as before: the same free sugary drinks, the same liveliness and noise, and the same crowd of customers. The only difference was that the person calling out the bets had been replaced by a tall, thin, dark-haired young man.

However, this young man was still inexperienced, so nobody paid him any attention.

Some customers even asked each other why Henry Williams hadn't appeared again...

Mr. K glanced at the offer board, where the Western Conference's first offer had appeared: $32 and a quarter.

"Give me 50 shares of Western League, go long!" Mr. K lazily slapped $50 on the counter.

The teller filled out the form and handed it to Mr. K, saying, "Sir, please pay the 25-cent transaction fee..."

Mr. K had already lit a cigar, taken a deep drag, squinted, and waved his hand, "I'll owe you one for now..."

The teller glanced at Mr. K, who seemed like someone to be trifled with, then silently took back the transaction slip, wrote "25 cents transaction fee unpaid" on it, and handed the slip back to him.

Mr. K casually found a seat near the counter, squinted at the price list, and began to carefully examine his cigars.

Meanwhile, Paine Weber Securities.

Larry took the pre-prepared trading orders, filled out a market order for 1000 shares, and a limit order for 1000 shares, and handed them to trader Samuel Wallace.

Yes, this clumsy guy has been promoted to a full-fledged trader by the branch manager.

Larry was a little worried and specifically instructed, "Samuel, remember to hand them both to the telegraph office; these two transaction slips are together..."

Samuel stared at Larry, then after a few seconds uttered an "oh," before turning and walking to the telegraph room to send a message.

Larry watched his retreating figure with a pang of worry, then followed him to the telegraph room, only feeling relieved after watching him hand both transaction slips to the telegraph operator.

Eight minutes later, at the New York Stock Exchange.

Peter Pan, a floor trader at Paine Weber Securities, received two strange trading orders.

On the first trade order, the client requested to buy 1000 shares of Western Union at market price. Peter Pan recalled that the daily trading volume of this stock was not very large. Although the client's order was only for 1000 shares, it was possible to drive up the stock price by several dollars.

Peter Pan did not object to the commission;

Interestingly, in the second transaction, the client requested that if the stock price exceeded $35, they would short 1000 shares at the original price of $35.

“Hedge? Interesting! That’s why the transaction is a bit complicated…” Peter Pan smiled.

There weren't many orders this morning, so Peter Pan took the two transaction slips and went straight to the electrical and telecommunications counter in the northeast corner of the exchange.

Peter Pan first asked at the counter, and at that time the stock price of Western League was still at the opening price of $32 and a quarter, and had not changed at all.

"This stock hardly fluctuates; at most, 1 shares are traded a day," the quote clerk muttered.

Peter Pan nodded, walked a few steps to the group of floor traders, extended his left palm towards himself, fingers together, and said...

"Does anyone have any Western Conference players? I'd like to buy some; you guys make an offer first."

Several floor traders waiting for orders glanced at Peter Pan. One of them pulled out an order form, glanced at it sideways, raised his arm, and said, "I have 350 shares, client limit price $34.5!"

Peter Pan nodded, then asked, "Anyone else? Give me some more!"

The floor traders knew this wasn't enough to fulfill their orders, but Western League stocks were usually traded very little, so they didn't have many orders on hand.

At that moment, a rather slow-witted floor trader slapped his forehead, then pulled one out of his pile of order books, examined it closely under his nose, and before speaking to Peter Pan,
“I have 500 shares here! Oh, and yes, the client's offer is $35.5!”

Peter Pan nodded, asked a few more questions, and found that no one held any more shares of Western League. He then went down and bought 850 shares of Western League from the two men.

At that moment, the clerk at the counter had already written the two new Western Conference prices on wax paper with a stylus and dropped them into the rotary printing press.

After completing the trade, Peter Pan casually approached a floor trader and muttered, "A day trade? $35.5, want to do it or not?"

The man's eyes lit up, a smile spread across his face, and he quickly said, "I'll do it!"

In the context of trading, a "rollover order" has another meaning: it means that a trader has a buy or sell order that can be offset against the previous one. However, since the same brokerage firm cannot offset its own orders, it must find another trader on the floor to execute the trade again.

For floor traders, such orders result in two instant transactions, earning them commissions twice – why wouldn't they take advantage of it?

So Peter Pan sold him 850 shares of Western Union, and then bought them back according to the client's second limit order.

The clerk behind the counter nodded and then recorded two identical latest quotes from the Western Conference: $35.5.

Peter Pan completed part of the orders for two orders and asked with his palm facing outward, "I have 150 shares of Western League here, priced at $35.5. Anyone interested?" The other floor traders looked slightly surprised to see him sell immediately after buying, but such things were not uncommon in the market.

Peter Pan waited for three minutes, but still no one made a bid.

Peter Pan looked impatient and waited for another two minutes before a trader rushed over and signaled to buy 500 shares of Western Union at $32.

Peter Pan finally met this man and quickly sold him the remaining 150 shares for $32.

Peter Pan then returned to the floor counter of Paine Weber, completely unaware that his hedging trade, which took less than 10 minutes, had already stirred up a storm in Boston...

When the Western Union stock price climbed to $34.5, Mr. K went to the trading desk and requested to close his position.

Before the trader could even fill in the closing price, the Western Conference's second offer came in: $35.5!

Mr. K frowned and covered the transaction slip with his hand. "It's not $34.5 anymore. Calculate it according to the latest price!"

The teller reluctantly wrote "Closed position at $35.5" on Mr. K's transaction slip and signed his name.

Mr. K took the transaction slip, then placed another $100 order and said in a gruff voice, "Western League, short 100 shares at market price!"

The teller was taken aback and quickly asked, "Sir, you just closed your position, are you going to short now?"

Mr. K glared at the teller and said coldly, "I don't like it, and I think it's going to fall back down. Is there a problem with that?"

The teller sniffed, not daring to say anything more, and then filled out another transaction form, "Short 100 shares of Western Union at $35.5, margin $1." She was about to ask Mr. K for the transaction fee, but when she met Mr. K's squinting eyes, she dared not speak.

So he filled in "Transaction fees not paid, to be collected upon closing the position" on the transaction form, and then, with a forced smile, handed Mr. K the order for 100 shares of shorting Western Union.

Meanwhile, the same thing was happening at 35 other betting banks in the Greater Boston area.

However, Mr. K's assistant there needs to cash out his profits at the cashier before he can place an order at the counter.

Seven minutes later, the Western Conference's stock price had returned to $32.

Larry had said that a profit of just 2 points would be enough, so Mr. K didn't hesitate any longer. He went to the trading counter to close his position and then handed both Western Conference orders to the cashier.

The cashier took the order and busied herself calculating the client's profit, while saying to Mr. K,

"Your long position of 50 shares of Western Union yielded an earnings of $3.25 per share, resulting in a profit of $162.50. Your short position of 100 shares of Western Union yielded an earnings of $350 per share, resulting in a total profit of $350. After deducting the 50-cent transaction fee, your total profit was $512!"

As she spoke, the cashier first counted out the principal of $150 and then the profit of $512, handing it to Mr. K.

Mr. K looked at the $662 in his hand, raised his eyebrows, and then put the dollars into his pocket.

Just then, the young man at the price counter called out, "Breington, $20.5!"

Mr. K chuckled, then pulled out 50 shares of Barrington and happily went to close out his position.
.
That evening, still at the Black Knight Bar, Larry and Mr. K reviewed the day's gains.

Mr. K dispatched 35 young men, with a total investment of $2800. One of them, holding $50, was robbed, and two others, also holding $50, didn't have time to short sell. The actual amount of money involved in this Plan C, going long or short on Western Union, was $2650, representing 2650 shares.

If each share earns an average of 5%, the profit is $13250. If we add the two $50 gains of only 3%, the actual profit is $13550.

However, in practice, things differed. In today's long and short position on the Western Conference, the two players actually made a profit of $13680.

Larry and Mr. K were both very satisfied!

Mr. K then counted out the $680 reward for the 34 young men who completed the task, intending to distribute it to them. The remaining $1.3 would be split between Larry and Mr. K, each receiving $6500.

Mr. K respectfully handed Larry the $6500, and then voluntarily took out his own profit of $512 for the day and handed it all to Larry.

"Boss, this is what I earned today from the Western Conference, and it includes a share that you, as the boss, should accept!" Mr. K said with a fawning smile.

Larry nodded, took $180 from his own $6500, put it together with Mr. K's $512, and said to Mr. K,

“I’ll add $20 to each guy’s delivery fee! I’ll cover that. Also, to the guy who got robbed, if you verify that this is true and not something he made up, give him $12 as well.”

Mr. K frowned and asked, "But boss, won't giving them $40 each spoil their appetites?"

Larry chuckled, took a puff of his cigar, and said, "Mr. K, have you ever heard of the Assassins, the ancient assassination organization of the Persian Empire?"

Mr. K frowned, indicating that he had never heard of it.

Larry gave Mr. K a brief overview of the Assassins, an assassination organization that had plagued Persia for centuries. When Mr. K heard that this organization, active in the 13th century, had assassinated French nobles and the King of England, he was immediately impressed.

Larry waited until Mr. K had fully processed this information before continuing.

"Mr. K, those assassins are absolutely obedient to their master. When they were just adults, their master drugged them and sent them to a castle where they could enjoy endless food, wine, and beautiful women. After the assassins had enjoyed themselves for three days and were unable to extricate themselves, their master drugged them again and sent them back to the training ground. Then the master told them that the place they had been before was paradise, and if they obeyed the organization, they would return to paradise after death!"

After Larry finished speaking, Mr. K's face showed a look of sudden realization.

Larry continued, "We're in the same boat now. If you want to win the loyalty of your men, you have to give them enough at once so they never want to go anywhere else. Mr. K, after this mission and the reward, they'll stay by your side even if you don't pay them."

Because they know that only we can enable them to earn in a single day what others couldn't earn in two months.

Mr. K stared into Larry's eyes and nodded heavily. "I understand, boss!"

Larry continued, “Remember, anyone who disobeys orders or tells outsiders about how they made money should be kicked out of the team immediately, even if they tell their own parents… If you can’t keep secrets, you can’t get anything done! Okay, go now…”

Mr. K nodded again, put away his money and the extra bonuses for his employees, and prepared to leave.

“Wait a minute,” Larry suddenly called out to him, and gave Mr. K a smile. “Remember to tell them that the extra $20 is a bonus from their boss.”

Mr. K nodded again, "I understand, boss."

Larry took a deep drag on his cigar, exhaled the smoke, and waved to Mr. K, indicating that he could leave now...

(End of this chapter)